Utilities Receive Proposals From Retail Suppliers For Supplier-Offered Load Shaping Pilot Programs

October 16, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Baltimore Gas & Electric and Pepco have informed the Maryland PSC that, in aggregate, two retail electric suppliers have filed proposals in response to the utilities' RFPs for load shaping pilot programs

As exclusively first reported by EnergyChoiceMatters.com, the PSC had previously directed the utilities to issue RFPs for retail suppliers to propose customer load shaping pilots at the EDCs. See background on the PSC's RFPs and sought pilots here

BGE reported that it received three bid proposals from two retail suppliers -- two proposals submitted by Inspire Energy Holdings LLC [sic], and one proposal submitted by Constellation.

Pepco received two bids from one retail supplier: Inspire, Inc. [sic]

The proposals are discussed further below

Pepco

Pepco described the proposals it received as follows:

• Inspire Proposal #1 – Flat Supply and Delivery Bill + Smart Thermostat + App Engagement - A subscription model for smart home energy management that allows customers to use their phone via an application to manage their smart home through smart thermostats and various rebate offerings. This proposal includes supplier consolidated billing and billing customers flat supply and distribution rates.

• Inspire Proposal #2 – TOU Supply + Flat Delivery Bill + Smart Thermostat + App Engagement - Very similar to Inspire’s Proposal #1, but incorporates hourly Time of Use (TOU) prices for summer and winter seasons. Inspire’s highest peak-hour rate is $0.28254 compared to Inspire’s lowest of $0.07883 (for both summer and winter).

Pepco said of the proposals that, "While Inspire's proposals are unique and innovative proposals for Pepco's customers, it is worth noting that Inspire's Proposal #1 is very similar to Inspire's previous proposal submitted in this proceeding, which the Commission declined to adopt. Inspire's Proposal #2 incorporates is [sic] virtually the same as Proposal #1 with the exception of incorporating TOU supply prices. After reviewing both proposals. Proposal #2 is Pepco's preferred proposal because it incorporates both supply TOU rates and behavioral load shaping via smart thermostat and rebates."

Pepco further said, "However, Pepco does have some concerns with both of Inspire's proposals. First, both proposals would require supplier consolidated billing, which is not currently implemented in Maryland. Indeed, the design and implementation of supplier consolidated billing is currently being addressed in Case No. 9461 and is not planned to be implemented until 2022. Second, Inspire proposals offer a flat distribution charge to pilot participants, which undermines the purpose of distribution TOU rates. In order to maximize the price signal to customers to use off-peak energy, both supply and distribution should have TOU rates. Third, both Inspire proposals require Pepco to provide Inspire with specific customer information for marketing purposes that Pepco believes would be a violation of Pepco's Supplier Coordination Tariff without customer consent. Finally, Inspire has indicated that it would like to provide 'personalized' pricing to individual customers, but it is not clear how different pricing will apply to each customer in Inspire's proposals.

BGE

BGE did not summarize the proposals, but highlighted, "certain aspects of the proposals received by BGE that may conflict with the requirements of the RFP as well as concerns regarding the implementation of the bid proposals."

BGE said that, "Please note that the proposal received from Constellation was marked as 'Proprietary and Confidential.' Therefore, BGE will be providing its comments on the Constellation proposal in a separate confidential attachment."

BGE said that its concerns and limitations in implementation for the two Inspire proposal are the same for both proposals

BGE said, "Inspire’s proposals both require supplier consolidated billing, which is not a currently authorized form of billing for retail supplier customers. It is important to note that the Commission has docketed Case No. 9461 to implement supplier consolidated billing. In Section 1.C. Qualifications, the RFP states, 'If seeking to use this Utility Consolidated Billing or other authorized form of supplier billing, this will include the ability to calculate and bill customers using existing EDI capabilities and provide adequate billing information in the existing utility bill format.' The proposals submitted by Inspire do not comply with this requirement and execution of either proposal would be dependent the implementation of supplier consolidated billing pursuant to Case No. 9461."

BGE further said, "Should either of the Inspire proposals be modified to use a currently authorized form of supplier billing, BGE notes that there may be additional concerns regarding the proposals."

BGE listed its additional concerns as follows:

• "The proposals submitted by Inspire request that BGE provide customer information updated monthly, which would require customer consent in order for BGE to provide it to Inspire."

• "Inspire proposes offering a flat distribution charge to pilot participants, which undermines the purpose of distribution TOU rates. In order to maximize the price signal to customers to use off-peak energy, both supply and distribution should have TOU rates."

• "The Inspire proposals each state, 'In order to effectively enroll participants through in-person sales, it is critical that Inspire is able to generate a personalized price during the sales interaction.' As proposed, it is also unclear how the personalized pricing in each of the bids would be applied and BGE would need additional information to ensure that the proposals comply with existing EDI capabilities and understand the IT impacts that the proposals may have."

• "The Inspire proposals also request that the sales of Inspire thermostats be supported by a $75 rebate through Maryland’s EmPOWER program. BGE notes that a rebate for any EmPOWER approved device should be limited to the actual EmPOWER rebate, which may change."

• "Finally, Inspire’s proposals include an energy or temperature optimization feature. BGE notes that customers participating in Inspire’s proposed pilot program would not be eligible to participate in BGE’s demand response programs. As BGE’s demand response program currently requires control of the thermostat, or controlling device, Inspire’s proposal would conflict with the ability to participate in BGE’s programs. While this should not limit Inspire’s program, customers should be made aware that they may not participate in both BGE demand response program and Inspire’s pilot program."

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